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Alex Lielacher, 21 Nov 2017 - Africa, Cryptocurrency Adoption, Investment

When the bitcoin ecosystem began to take shape, one of its first “killer apps” was supposed to be its potential for providing banking services and low-cost remittances to regions of Africa poorly served by the traditional banking sector.


Due to bitcoin’s relatively high transaction fees, however, and the lack of exchange liquidity to convert bitcoin into local fiat currency, personal remittances using bitcoin have proven to be more expensive than existing services like WorldRemit — and using bitcoin for personal payments makes little sense for most Africans.


So what is happening in Africa’s crypto space? In terms of bitcoin adoption, the landscape is by no means consistent. The leading bitcoin economies — measured by startup activities, community meetups, and trading volumes — are South Africa, Nigeria, Kenya, and Ghana.


Perhaps unsurprisingly, these four countries also have some of the largest economies and highest internet usage levels in Africa.


Internet penetration plays a major role in bitcoin uptake and has been one of the main challenges for wider adoption across the continent. Despite the common wisdom a decade ago that African nations would be able to leapfrog the requirement for traditional telephony infrastructure to deliver internet services, today’s reality has fallen short.


While mobile phone penetration is high, mobile data remains expensive and hotspotting with a cellphone to receive internet on a laptop is cost prohibitive for most — even in countries like Kenya and South Africa, which have comparatively advanced broadband infrastructure. 

Africa’s leading Bitcoin startups

Another innovative startup is South Africa’s the Sun Exchange — an online solar marketplace that allows investors to purchase solar panels for local businesses and communities in Africa using bitcoin. In return for providing solar cells to schools, hospitals, and factories, investors receive rental income.


There are also several local bitcoin exchanges including ICE3X, which operates in South Africa and Nigeria and allows users to buy bitcoin using local currency, Golix, which enables Zimbabweans to purchase bitcoin using US dollars and NairaEx — one of Nigeria’s most popular exchanges.


Additionally, there are many startups leveraging blockchain technology to innovate.


For example, Ghanaian startup Bitland, which aims to enable citizens to record land deeds onto the blockchain to prevent unrightful loss of land ownership and South African Custos Media Technologies, which is fighting digital content piracy using the blockchain.
Scams are driving adoption

Unfortunately, Ponzi schemes are alive and well in several African countries and have even become a driver for bitcoin adoption on the continent. Bitcoin-focused social media groups and Telegram channels are often littered with referral links to MMM, OneCoin, and other dubious ‘investment schemes’ that promote bitcoin as a payment method.


Despite official warnings by several central banks regarding the activities of OneCoin and MMM Global, for example, these schemes are seeing increasing investment from cryptocurrency newcomers attracted by high bitcoin prices and hype.


To combat the rise in bitcoin scams and the negative attention they bring to the cryptocurrency space, groups such as the CDIN (Cryptography Development Initiative of Nigeria) have been established to educate individuals about cryptocurrency overall, and to combat cryptocurrency-related criminal activity.

Bitcoin regulations divergent across Africa

Regulation plays a major role in bitcoin adoption and the health of its economy, but like the rest of the world, there remains divergent views across Africa regarding the appropriate legislative approach.


At the positive end, the South African Reserve Bank (SARB) has so far been open towards cryptocurrency use and is a big proponent of blockchain technology. This has created a very supportive environment for fintech startups — including those using bitcoin — which has seen South Africa lead the charge in bitcoin adoption on the continent.


At the other end of the spectrum, The Central Bank of Kenya issued a warning against the use of digital currencies in 2015 and according to local sources, the CBK also instructed Kenyan banks not to provide bank accounts to bitcoin startups.

This resulted in BitPesa having its local bank accounts shut down and has prevented local bitcoin startups from acquiring a business bank account. Interestingly, though, despite the Kenyan central bank’s attempt to hamper bitcoin adoption, Kenya actually has one of Africa’s most vibrant bitcoin economies.


In January 2017, the Nigerian Central Bank (CBN) banned Nigerian banks from conducting banking transactions using bitcoin and other digital currencies. However, this was followed up by the CBN stating that "[the] central bank cannot control or regulate bitcoin. [The] central bank cannot control or regulate blockchain.


Just the same way no one is going to control or regulate the Internet. We don’t own it." In other words, individuals in Nigeria can legally use bitcoin.The Namibian central bank, on the other hand, has announced an outright ban of digital currencies such as bitcoin while Algeria announced that it intends to ban bitcoin in 2018.


The Egyptian central bank has rejected the use of bitcoin locally and has no plans of legalizing it as a payment method. Swaziland’s central bank, conversely, is actively researching cryptocurrencies to discover whether they could help the country's economy.


In Zimbabwe, Ghana, and the majority of remaining African countries, regulators have not yet issued any specific regulations in regards to cryptocurrency use, which means individuals can buy, sell and transact in bitcoin as they please.


As increasing bitcoin trading volumes in South Africa, Kenya, and Nigeria indicate, bitcoin is on the rise in Africa.


With the medium age across the continent currently at 19.5 years-old (compared to 37.8 years in the U.S and 46.1 in Japan) there is certainly considerable upside in terms of a young population open to embracing new financial solutions.


Growth for cryptocurrency remains dependent on low-cost internet access, however, which given Africa’s infrastructure challenges is likely to remain an obstacle to more widespread adoption for the foreseeable future.

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Saïd Business School is launching a Blockchain Strategy Programme to help businesses get to grips with new computing reality. With bank, and other, jobs facing elimination due to disruptive technologies, enterprises across the board must prepare for what may be a blockchain revolution.

“‘The application of the core technology behind bitcoin – blockchain – extends much further than the widely recognised cryptocurrencies,” said Nir Vulkan, Associate Professor of Business Economics and Co-convenor of the Oxford Blockchain Strategy Programme at Oxford Saïd.

“Blockchain has the potential not only to change how we transfer value, but could shift our systems of trade, identity, efficiency and governance across all sectors, radically transforming traditional approaches to management. What participants will understand from our course is what is on the horizon for their business and how to prepare for that.”



Nir Vulkan, Professor, SBS

Why having a blockchain strategy matters

As blockchain technology promises to change radically the nature of business, it will alter the job landscape and become disrupting across industries. Saïd Business School, at the University of Oxford will offer, from February 2018, a short course (six modules over six weeks) to prepare executives to think about their enterprises’ blockchain strategies.

The context is that of a McKinsey report which predicts that blockchain will ‘generate $80-$110 billion in impact’ by 2021. The Oxford Blockchain Strategy Programme will offer a fundamental understanding of:

• where to use blockchain technology
• how blockchains work
• the structural and market implications.

Blockchain is at a tipping point – where clarity is emerging about its potential use across multiple industries including manufacturing, healthcare, energy and financial services. Behind this is a fear of job losses and massive industry disruption, as well as opportunities for new business models and emergent technologies to be created.

The Saïd Business School Programme

Designed for senior executives and managers – as well as professionals with a keen interest in blockchain – the Programme seeks to understand how blockchain will affect and shape business. It will provide executives with:

• an actionable strategy (to respond to blockchain)
• guidance as to how to incorporate it into their enterprises’ long-term planning.

Teppo Felin, Professor of Strategy at Oxford Saïd, will provide a framework for companies to capitalise on the blockchain opportunity. The programme will also feature insights from guest speakers such as Meltem Demirors, Director at the Digital Currency Group, and Professor Sandy Pentland, one of the world’s leading data scientists, as well as a number of practicing entrepreneurs, technologists and financiers of the blockchain sector.


In addition to insights and advice, participants will equip themselves with two strategy frameworks developed specifically for the programme:

• the Oxford Blockchain Strategy framework
• the Oxford Blockchain Regulation framework.

On successful completion participants receive a certificate of attendance from Saïd Business School. Possibly access to the Oxford Saïd Executive Education alumni network is as valuable.

What does it mean

Serious blockchain usage arrived with Bitcoin. Since then its possibilities have expanded in all directions, led by finance but by no mean exclusively. With time the possibilities multiply (see FortKnoxter and Substratum for tangential examples).

Given this, the arrival of a concise Blockchain Strategy course from a leading business school has significance. Furthermore, by focusing on the impact and disruption possibilities on existing business models as well as new opportunities, it should offer multiple value points.

Perhaps the biggest challenge is whether Saïd Business School can contain attendees’ fascination with the technological underpinnings.Saïd Business School to educate on Blockchain Strategy was last modified: November 16th, 2017 by Charles Brett

Charles Brett

Charles Brett is a business/technology analyst consultant. His specialist areas include enterprise software, blockchain and enterprise mobility tech (including metering). Specific industry sectors of interest and experience include finance (especially systems supporting wholesale finance), telecommunications and energy.



Charles has spoken at multiple industry conferences, has written for numerous publications (including the London Times and the Financial Times). He was the General Chair of the bi-annual High Performance Systems Workshop, 2005.In addition he is an author and novelist.


His Technology books include: Making the Most of Mobility Vol I (eBook, 2012); Explaining iTunes, iPhones and iPads for Windows Users (eBook, 2011); 5 Axes of Business Application Integration (2004). His published novels, in the Corruption Series, include:


The HolyPhone Confessional Crisis, Corruption’s Price:


A Spanish Deceit and Virginity Despoiled. The fourth in The Corruption Series – Resurrection – has is now available.Charles has a B.A. and M.A in Modern History from the University of Oxford. He has lived or worked in Italy, Abu Dhabi, South Africa, California and New York, Spain, Israel, Estonia and Cyprus.